Section 872: telecommunications switching centres

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

This section gives guidance on telephone exchanges in the occupation of mobile telephone operators for the purposes of switching traffic between various fixed line and mobile operators.

It also applies to telecoms equipment rooms used in conjunction with telecoms masts or fixed line networks but which are separately assessed, such as a room in a building housing the equipment for a rooftop mast installation.

It does not apply to switching centres that are part of fixed line (copper/fibre optic) networks (SCAT Code 275U). These buildings should not be subject to a separate assessment, being part of a whole network assessment. In terms of specification however such buildings are often similar in nature to those described in this section and as such this section can be referred to for general guidance when valuing such buildings as part of a network.

All will have significant rateable and non-rateable plant and machinery; see 6.1 below for further details.

2. List Description and Special Category Code

The majority of switching centres form part of fixed line telecommunication network hereditaments (Scat Code 275U) to the extent there are relatively few under this particular scat code, in total numbering less than 40.

3. Responsible Teams

The valuation and referencing of this class is the responsibility of the Non Domestic Rating Business Unit.

4. Co-ordination

The Telecoms Team has responsibility for this class ensuring effective co-ordination across the business units. The team is responsible for the approach to and accuracy and consistency of Telecommunications Switch Centre valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating list. Caseworkers have a responsibility to:

follow the advice given at all times

not depart from the guidance given on appeals or maintenance work, without approval from the Telecoms Team

seek advice from the Telecoms Team before starting any new work.

5. Legal Framework

There is no specific legal framework applicable.

6. Survey Requirements

6.1 Switching Centre

In general terms Telecommunications Switching Centres occupy converted industrial or office buildings and should be surveyed and valued in accordance with the Rating Manual, Section 6 - Part 3 - Section 380 Factories, Workshops and Warehouses or Section 730 Offices.

It is important to separately note the areas of the transmission/switching rooms, as the value of these areas is uplifted to reflect the fact they have been improved.

Full details of rateable plant & machinery should be noted. These will typically include.

Air Conditioning systems should be noted. Only those systems within ancillary office areas are considered rateable. The sophisticated systems found within the switching areas can be considered to be part of the “trade process” and therefore not rateable. For further guidance please read Rating Manual Section 6 - Part 3 Section 281 Computer Centres, Appendix A: Air Conditioning in Computer Suites – Rateability.

Fire protection systems should also be noted although again those within the switching areas are considered to be protecting the trade process and therefore not rateable.

Plant rooms and loading bays are usually outside of the main switching pod. These will generally be found to occupy unimproved space.

Ancillary office space should be measured and valued according to the applicable scale relativity. Improvements such as raised floors and air conditioning should be noted.

6.2. Mast

The mast(s) should be surveyed and valued in accordance with Rating Manual, Section 6 - Part 3 Section 860 Radio and TV Transmitting/Receiving Stations and Masts (Including Microwave Masts).

It will usually be of heavy-duty construction with the ability to accommodate microwave dishes as well as the usual antennae and sharers.

The mast will probably be in close proximity to the building, as the majority of the cabling will feed directly into the switch rooms.

Because of the above it is also important to note the fact there will be likely to be greater amounts of cabling and in turn supporting steelwork than stand alone masts.

6.3 Other Telecommunications Switching Centres

Whilst this could include a whole range of property types used for the purposes of telecommunications, the most likely examples would be.

i.Equipment rooms occupied by sharers for rooftop mast installations in office buildings, or
ii.Small cabins where the telecoms traffic is brought in on fibre occupied by a third party under a capacity agreement.

7. Survey Capture

Surveys should be captured on the Rating Support Application (RSA). Plans and surveys should be stored in appropriate folder within the Electronic Document Records Management (EDRM) system.

8. Valuation Approach

The valuation approach is a rentals based valuation for the building or land, with additions for rateable Plant & Machinery based on decapitalised cost at the statutory decap rate.

The valuation of the mast may be carried out within the MAV application (see Rating Manual, Section 6 - Part 3, Section 860, Telecommunications Masts, Practice Note 2017) but note that the address created should match that in the central database, and include the operator’s name Additionally, a remark is needed in the central database referring to the MAV application. In the case of steel container/cabins these should be valued on the basis of a site rent plus the de-capitalised cost of the structure.

9. Valuation Support

Practice note: 2017 - Telecommunications switching centres

1. Market Appraisal

The overwhelming majority of switch buildings are included as part of fixed line telecom network assessments to the extent that there are only a small number of stand-alone buildings covered by this practice note.

Since 2008 the actual number of hereditaments in this particular class has reduced as more have been connected to the occupier’s own fibre network.

The period 2008 – 2015 has seen significant growth in telecommunications, in particular in mobile data use with the introduction of smart phones so in general terms demand remains high for this class of hereditament.

2. Changes from the last Practice Note

There are no changes in valuation approach from the 2010 List Practice Note for this class of property.

3. Ratepayer Discussions

There have been no discussions with ratepayers.

4. Valuation Scheme

This practice note applies to stand alone telecommunication switch buildings only and not to those forming part of a telecommunications network with multiple network exchanges.

In general, telecom switch buildings are in converted industrial buildings.

Rental Evidence

Rental Evidence on fully fitted switch buildings is limited either because the occupier has converted the building for telecoms use and the rent will not reflect the improvements or the building is freehold and purpose built.

Valuation Basis

Valuations for this class should be on a rentals comparison basis, in line with levels of value, which would be appropriate for an industrial unit of equivalent age, specific to the locality, with an addition on the switch room element to reflect the fit out for telecoms use.

Following the 2005 rating list VT case, Cable and Wireless UK v. Subacchi, 2014 it was determined a 20% uplift is applied to switch rooms with raised floors.

Additions for external buildings, land and car spaces should be made where such items are not reflected in the levels of value for the locality.

For non-industrial buildings such as converted offices measured to NIA no uplift should be applied on the basis that the value already reflects the improved condition.

Telecom masts should be added and valued in line with the advice in Section 860 of the rating manual.

The valuation of the mast may be carried out within the MAV application (see Rating Manual, Section 6 - Part 3, Section 860, Telecommunications Masts, Practice Note 2010) but note that the address created should match that in the central database, and include the operator’s name. Additionally, a remark is needed in the central database referring to the MAV application.

Rateable Plant and Machinery should be valued in accordance with the Rating Cost Guide.

Practice note: 2010: Telecommunications switching centres

1. Co-ordination arrangements

This is a Group National Scheme Class. Responsibility for implementing the scheme as set out within this practice note lies with the group, as does responsibility for ensuring effective co-ordination.

2. Basis of Valuation

The valuation approach is a rentals based valuation for the building or land, with additions for rateable Plant & Machinery based on decapitalised cost at the statutory decap rate.

The valuation of the mast may be carried out within the MAV application (see Rating Manual, Section 6 part 3, Section 860, Telecommunications Masts, Practice Note 2010) but note this valuation should be deleted from the application once the appropriate rateable value has been calculated.

3. Enquiries

Any enquiries should be made via Technical Advisers to the Telecoms Team, Rating Directorate, CEO.

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